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Title 26 — Internal Revenue CodeRelease 119-73

§4373 Exemptions

Title 26 › Subtitle Subtitle D— Miscellaneous Excise Taxes › Chapter 34— TAXES ON CERTAIN INSURANCE POLICIES › Subchapter A— Policies Issued By Foreign Insurers › § 4373

Last updated Apr 6, 2026|Official source

Summary

The excise tax on foreign insurance policies does not apply in two situations. First, premiums effectively connected with running a trade or business in the United States are exempt, unless a U.S. treaty shields that income from regular U.S. tax. Second, indemnity bonds filed to secure payment of federal pensions, allowances, insurance, or to replace U.S. government bonds, notes, checks, and similar instruments are exempt.

Full Legal Text

Title 26, §4373

Internal Revenue Code — Source: USLM XML via OLRC

The tax imposed by section 4371 shall not apply to—
(1)Any amount which is effectively connected with the conduct of a trade or business within the United States unless such amount is exempt from the application of section 882(a) pursuant to a treaty obligation of the United States.
(2)Any indemnity bond required to be filed by any person to secure payment of any pension, allowance, allotment, relief, or insurance by the United States, or to secure a duplicate for, or the payment of, any bond, note, certificate of indebtedness, war-saving certificate, warrant or check, issued by the United States.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1988—Par. (1). Pub. L. 100–647 amended par. (1) generally, substituting provisions relating to effectively connected items for provisions relating to domestic agent. 1976—Par. (1). Pub. L. 94–455 substituted “State, or in the District of Columbia, within” for “State, Territory, or District of the United States within”. 1958—Pub. L. 85–859 reenacted section without change.

Statutory Notes and Related Subsidiaries

Effective Date

of 1988 Amendment Pub. L. 100–647, title I, § 1012(q)(13)(B), Nov. 10, 1988, 102 Stat. 3525, provided that: “The amendment made by subparagraph (A) [amending this section] shall apply with respect to premiums paid after the date 30 days after the date of the enactment of this Act [Nov. 10, 1988].”

Effective Date

of 1976 AmendmentAmendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1904(d) of Pub. L. 94–455, set out as a note under section 4041 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 4373

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73